Strategic Management Schools of Thought
STRATEGIC MANAGEMENT SCHOOLS OF THOUGHT
By Henry Waruhiu ESAMI
Henry Waruhiu
Digitally signed by Henry Waruhiu DN: cn=Henry Waruhiu gn=Henry Waruhiu c=Kenya l=KE o=ESAMI ou=ESAMI e=hwaruhiu@yahoo.com Reason: I am the author of this document Location: Date: 12/13/11 12:52:31
“We are the blind people and strategy formation is our elephant”
A wealth of information creates a poverty of attention.
Herbert Simon, Nobel Laureate Economist
SM Schools of thought
1. 2. 3. 4. 5. 6. 7 8 9 10
The Design School The Planning School The Positioning School The Entrepreneurial School The Cognitive School The Learning School The Power School The Cultural School The Environmental School The Configuration School
The Design School
Emphasis on the environment (SWOT) Strategy formation must be a deliberate process of
conscious thought (intuition, thinking) The Plan is the CEO’s The process must be informal The Process of formulation is key The grand strategy (turn key) must be had – the grand conception – the big picture…no emergent strategies here Strategy is Perspective
Goal is to fit/match internal capabilities to external
possibilities
The Planning School
Highly formalised approach though Rather than thinking about values, set
objectives 1st External and Internal Audits Strategy formulation Strategy operationalization Strict levels/hierarchy of strategy – Master plan Uses formal procedures and heavy on analysis
The Positioning School
Rooted in Military Maxims – Sun Tzu et al BCG…of stars, cash cows, question marks
and dogs Porter’s 5 forces: entrants, suppliers, buyers, substitutes, rivalry Porter’s generic strategies: cost leadership (low cost producer), differentiation (uniqueness) & focus (narrow segment)
The Positioning School
Premises: That the market place is competitive Strategy formation is about selecting
position Strategy is all about position in the market place
By Henry Waruhiu ESAMI
Henry Waruhiu
Digitally signed by Henry Waruhiu DN: cn=Henry Waruhiu gn=Henry Waruhiu c=Kenya l=KE o=ESAMI ou=ESAMI e=hwaruhiu@yahoo.com Reason: I am the author of this document Location: Date: 12/13/11 12:52:31
“We are the blind people and strategy formation is our elephant”
A wealth of information creates a poverty of attention.
Herbert Simon, Nobel Laureate Economist
SM Schools of thought
1. 2. 3. 4. 5. 6. 7 8 9 10
The Design School The Planning School The Positioning School The Entrepreneurial School The Cognitive School The Learning School The Power School The Cultural School The Environmental School The Configuration School
The Design School
Emphasis on the environment (SWOT) Strategy formation must be a deliberate process of
conscious thought (intuition, thinking) The Plan is the CEO’s The process must be informal The Process of formulation is key The grand strategy (turn key) must be had – the grand conception – the big picture…no emergent strategies here Strategy is Perspective
Goal is to fit/match internal capabilities to external
possibilities
The Planning School
Highly formalised approach though Rather than thinking about values, set
objectives 1st External and Internal Audits Strategy formulation Strategy operationalization Strict levels/hierarchy of strategy – Master plan Uses formal procedures and heavy on analysis
The Positioning School
Rooted in Military Maxims – Sun Tzu et al BCG…of stars, cash cows, question marks
and dogs Porter’s 5 forces: entrants, suppliers, buyers, substitutes, rivalry Porter’s generic strategies: cost leadership (low cost producer), differentiation (uniqueness) & focus (narrow segment)
The Positioning School
Premises: That the market place is competitive Strategy formation is about selecting
position Strategy is all about position in the market place